Massachusetts online gaming ‘could generate $175m per year’

Massachusetts online gaming ‘could generate $175m per year’

Wednesday, April 5, 2017
Could Massachusetts become the fourth US state to offer online gaming?

Last month it was revealed that state lawmakers were considering the legalisation of online gambling in Massachusetts – a move they say would both generate additional tax revenues and help keep the Bay State at the forefront of technological trends.

While the announcement has drawn a mixed response from both consumer groups and within the industry itself, the size of Massachusetts’ online gaming market could amount to $175 million each year, one analyst suggests.

Speaking with The Boston Globe in March, State Senator Jennifer Flanagan explained that creating a regulated online gambling market might entice software companies to come to Massachusetts.

“I think there’s a lot of merit to the idea of encouraging developers to come to Massachusetts to create the next big thing,” Flanagan said. “It’s constantly changing with new products and new technology. We’re trying to stay on top of it. But it isn’t easy.”

The move would make Massachusetts the fourth US state to permit online gaming, joining Nevada, New Jersey and Delaware.

The senator’s comments came just two years after the opening of Massachusetts’ first casino, Plainridge Park. The facility will be joined by two more integrated resorts, MGM Springfield and Wynn Boston Harbor, which are due to open in 2018 and 2019, respectively.

While the idea to legalise online gaming in the New England state is still preliminary, Colin Mansfield, director of corporate ratings for Fitch Ratings, said the sector could generate around $175 million per year.

“To give you some context, the online gaming market in New Jersey is about $225 million in gross gaming revenue per year now that PokerStars is in the market,” Mansfield told TotallyGaming.com.

“The revenues are taxed at 15% which sends about $34 million to the state in taxes each year. But in terms of spend per adult, we estimate in New Jersey it’s about $32 per year per adult.”

He added: “If you use the same assumptions and apply it to Massachusetts, the size of the online gaming market in terms of annual gross gaming revenue would be about $175 million, give or take depending on what you assume for spend per adult.”

“Penn National’s Plainridge casino in Massachusetts already generates about $155 million in annual gross gaming revenue alone, and that’s the smallest of the three casinos in the state.”

While Mansfield noted that states such as Pennsylvania, New York or California would be more of a “needle mover” for the industry, due to their larger population bases, he highlighted the fact that online gaming has struggled to gain traction in state legislatures across the US.

“For instance, Pennsylvania has been trying to legalise internet gaming since 2013 to no success, New York has been trying with internet poker for the past few years, and California has also been trying to legalise online poker for years but can’t reach a compromise on whether to allow PokerStars into the market or not,” he said.

Totally Gaming says: Massachusetts is not the first state to have been earmarked to follow in the footsteps of Nevada, New Jersey and Delaware and open its doors to online gaming. However, while the promise of additional tax revenues might not be enough to convince the Massachusetts legislature alone to permit remote gambling, the idea of an ‘early adopter bonus’ – that of attracting software companies to what is already a technology-focused state – could just tip the balance in favour of regulation.

Latest

1on1 with Teri Howe at Agilysys

1on1 with Teri Howe at Agilysys

New Jersey rising: Caesars completes $30m Harrah’s Resort enhancement

ECA welcomes distinguished new member

Hard Rock unveils details of Spanish mega-resort

Gaming Products & Services Directory

The essential directory for the gaming industry